- The Washington Times - Tuesday, October 22, 2002

ANCHORAGE, Alaska (AP) One of the things that sets Alaska apart from the Lower 48 besides the spectacular glaciers and the long winter nights is an oil-royalty fund that pays every man, woman and child a big dividend each year just for living here.
But for the first time in 20 years, those payments are in jeopardy.
The Alaska Constitution says the principal of the Alaska Permanent Fund about $22 billion cannot be touched. And because of the downturn on Wall Street, the fund has been dangerously close to, and sometimes below, the hands-off mark.
The dividend checks have been mailed out every fall since 1982. This year's payout was $1,540 per person; all told, about 600,000 Alaska residents are splitting $900 million.
The loss of the dividend next year could have a huge effect on Alaska's economy and the lives of its poorer residents, such as fishermen barely holding on in rural villages.
While many in Alaska use their piece of the pie on shopping sprees at the mall or put the money down on new cars, snowmobiles and hot tubs, poorer people often depend on it for help with housing and other basics, like gasoline, heating oil and electricity, which are expensive in Alaska's remote areas.
"The dividend helps a small community a lot, because there's no work out here," said Moses Toyukak, one of three employees at the power plant in the village of Manokotak, about 350 miles by air from Anchorage. "I've been putting mine toward housing the last eight years."
Nearly half of Manokotak's 80 families have incomes of $25,000 or less, so the loss of the dividend would cut their family income by 30 percent or more. The average Manokotak family has five persons.
Villagers catch fish and dry them, hunt moose and caribou for food, and eat beaver as well. But their hunting forays are on all-terrain vehicles or snowmobiles, and gas costs $2.45 a gallon.
Pete Andrew is a salmon fisherman in Dillingham, a town of 5,000 where the cost of living is about 50 percent higher than in Anchorage. Milk is $6 a gallon, cabbage $7 a head.
He has been putting the dividends away for college for his four children, ages 11 through 16. "The focus in the future is going to be college," he said.
The Permanent Fund was set up in 1976 after oil from Prudhoe Bay began flowing via the Alaska pipeline. Royalties paid to the state by the oil companies are put in the fund and invested, about half in the stock market, 40 percent in bonds, and 10 percent in real estate.
In 2000, the fund's value peaked at $27.8 billion, and the dividend that year reached a high of $1,964 for every Alaskan.
The yearly windfall sends many Alaskans on shopping sprees and prompts car dealers and stores to hold sales.
"I would guess over 75 percent of the folks that come in here during the permanent fund time are spending their permanent fund dividends," said Maggie O'Hara, co-owner of Bill's Cat House, which sells Arctic Cat snowmobiles and other recreational vehicles. "And they usually spend them on coats, helmets and used snowmachines. Which is why we have our big sale at this time."
And if there's no dividend?
"People will buy fewer toys, I think," she said.
This year's dividend was equal to roughly 5 percent of Alaska's $17 billion economy.
"If there was a loss of the complete dividend, it would be a lean Christmas for our retailers, and for many families and households who depend on it," said Gregg Erickson, an economist in Juneau.

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